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The Three Axes of Personal Finance

Baptiste Wicht | Updated: |

(Disclosure: Some of the links below may be affiliate links)

There are three main axes of personal finance: your expenses, your income, and investing. These axes are the ones on which you can work to improve your personal finance.

In the end, you want to improve your wealth or improve your state of living. Whether you want to retire early or afford an expensive vacation to Hawaii, you can work on these three axes.

In this article, we will see what you can do to improve your financial situation by using the three axes of personal finance.


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The expenses are a very interesting axis. If you reduce your expenses, you will increase your savings. But by lowering your expenses, you will also reduce the money you need to be financially independent.

The duality of the expenses is why many people only focus on lowering their expenses. However, it is important to be careful not to lower expenses lower than comfortable. Optimization is good, but if it makes you miserable, it is much better to spend more and focus on the other two axes instead. This may sound obvious, but many people are making themselves unhappy just to reach a goal they believe will solve everything.

There are two main ways to reduce your expenses:

  1. Stop doing (or buying) some things. For instance, if you stop going on vacation, you will likely save money.
  2. Pay less for the same value. For instance, paying less for your health insurance will help you save money without sacrificing anything.

For the first category, you need to be very careful about not stopping to do the things you love. Some people focus too much on their financial goals and become miserable. But for most people, there are still several things that can be cut. For instance, going less often to the restaurant can save you a lot of money but will not necessarily make you miserable.

For the second category, it is almost always worth optimizing the costs without losing value. Now, you also have to consider the cost of time. If it takes you several hours to optimize something that saves you 1 CHF per month, you should not do it. But taking half an hour each year to optimize your health insurance is worth it! Most people spend way too much on this item. And the base health insurance is the same coverage for everybody!

If you have strong financial goals, I encourage you to stop spending money on things that do not make you happy. And then, reduce the price you spend on other things without reducing your quality of life. As soon as you know your spending, you will discover many things you can do to spend less.

The biggest issue in Switzerland is that most people assume that since Switzerland is an expensive country, they must spend a lot of money. But this is not necessarily true. There are ways to save money in Switzerland (and in any other country as well):

  • Change your health insurance for a cheaper one.
  • Ask for a reduction of rent if the reference interest rate decreased.
  • Cook at home instead of eating out.
  • Shop in a cheaper grocery store.
  • Avoid leasing and loans.
  • Switch to cheaper phone and internet plans.

The list can go on for a while. If you want more information, I have a list of things you can do to save money every month. There are many options that many people do not even consider. Some people live well in Switzerland with less than 5000 CHF in expenses per month (and you can significantly lower than that).

People should optimize their expenses before focusing too much on the other axes. Nevertheless, the three axes are most potent when all worked on together. Having a very high level of expenses means you will have to work very hard on the next axis, your income.


The second of the axes of personal finance is income. If you increase your income, you have more capacity for saving. That is if you do not increase your expenses at the same time. Indeed, you need to be careful about lifestyle inflation.

Of course, there is nothing wrong with spending a little more when you earn more money. The trap is to increase your expenses as much as your increased income. In the long term, lifestyle inflation is not sustainable because you are putting yourself at risk if your income is reduced.

Now, income has an advantage over expenses. It has higher limits. Eventually, you will not be able to reduce your expenses further. You can reduce them much lower than most people think, even in Switzerland. But there comes the point where reducing them further would not give a comfortable lifestyle. And this point comes differently for different people.

On the other hand, income has very high limits, virtually infinite. I am not saying that it is easy to earn a million per year. But I am saying that earning a million per year is possible while the lowest you can reduce your expenses is 0 CHF. There is no way to go lower.

Many people believe that they cannot earn more money. But in a lot of cases, this is not correct. Sometimes, it is challenging to increase your main income; it is true. But it is often possible to supplement it or to change your main job to increase your income.

Again, there are several ways to increase your income:

  1. Work on your main career: get raises and promotions to earn more money.
  2. Change to a new main career to enter a higher-income one.
  3. Move to another place where salaries are higher.
  4. Start a side hustle to complete your income.

And there are probably more ways to increase your income. But the thing is, it is possible to increase your income. It may take a lot of work or time, but there are ways to do it.

While the first axis worked on two fronts, your income will only work on one front. Reducing your expenses will increase your savings and will reduce your goal for financial independence. But increasing your income will only increase your savings. It will not change your main financial target.

Once you have completed work on the first axis, working on your income will be a great way to reach your goals faster. It may not be easy, but the benefits of this axis can be very high. The income axis will help the other two axes as well.


Finally, the third of the axes of personal finance is investing. Investing will serve as your accelerator. It will make you reach your goals faster and will help you fight inflation.

If you have long-term goals and can save some money, it is important to invest your money. At the beginning of your investing journey, your gains may not seem like much. But as you invest more and more, you will start getting the benefits of compounding. When your capital gains are starting to be important, investing will become very powerful.

It is important to realize that investing is possible even with low savings. There is nothing wrong with investing a few hundred of CHF per month. There are ways to invest with minimal fees. The important thing is to get started investing.

And ideally, you should start investing as early as possible. Now, it is never too late to invest, either. Many people think it is too late, but I do not think it is ever the case. As long as you have some medium-term goals, investing is great.

There are many ways to invest your money. For instance, you can:

  • Invest in the stock market.
  • Invest in real estate.
  • Invest in precious metals.
  • Invest in P2P Lending.
  • Invest in a startup.

And there are many more than that.

Investing in the stock market is the way that suits me the most. And I think it is the most accessible and stable of these ways of investing. Now, you may prefer another way of investing. Just be careful about not taking too many risks with P2P Lending or cryptocurrencies.

Regardless of which way you invest, you need to be careful about the investing fees. The fees are the area you generally have the highest control on. You want minimal fees for all your investments. Remember that you will pay fees even when investments are going poorly.

Depending on your goals, you may invest differently. If you have a long-term horizon, you may consider investing aggressively (keep it reasonable). But if your goals are in the next two or three years, this may not be suited. Always consider your goals!

If you invest in the stock market, I recommend investing only in broad index funds with minimal fees. And I recommend doing it yourself by investing directly in ETFs. If you do not know how I have a guide to get started in the stock market. If this is too much for you, you can also consider Robo-Advisors. But they will incur significantly more fees.

If you have worked well on the other two axes, you should have some savings. Once you have enough saved for your emergencies, you should invest your extra savings. It will help you grow your net worth faster.


With these three axes of personal finance, you can see several different ways to improve your financial situation.

People with strong financial goals should work on these three axes together. This is the case for people trying to reach financial independence. Working on the three axes is the best way to reach goals faster.

Each of these three axes works well with the other two. For instance, reducing your expenses and investing extra savings will make your effort worth more in the long term. And increasing your income (without your expenses) will lead to more money to invest.

We are relatively satisfied with our level of spending, the first of the three axes. There are a few more things we want to optimize our expenses. But overall, we have a lifestyle that suits us. I will still optimize if I can without changing the quality. But I am not going crazy on that axis. On the other hand, we are now trying to find new ways to increase our income. This will be the best way to reach our goal faster.

Finally, we are still investing our savings to accelerate our net worth growth. Our system for investing is pretty much set and works well. I do not think we will do different things in the coming years except continue to invest in the same way. By working on the three axes together, we will have the best chance to become financially independent.

You may also have approached these three axes as the Earn Save Invest (ESI) acronym. This is well-known because of the ESIMoney blog. An interesting article is the ESI Manifesto if you want another take on the subject.

If you do not know where to start, you can start by reducing your monthly expenses. It is a great way to start improving your personal finances. You can then work towards the other two axes.

What about you? On which of these three axes are you focusing?

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Download this e-book and optimize your finances and save money by using the best financial services available in Switzerland!

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Photo of Baptiste Wicht

Baptiste Wicht started in 2017. He realized that he was falling into the trap of lifestyle inflation. He decided to cut his expenses and increase his income. This blog is relating his story and findings. In 2019, he is saving more than 50% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.

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4 thoughts on “The Three Axes of Personal Finance”

  1. Hi Mr. TPS,

    Just to say that besides reading this excellent article (simple and concise), I have been reading and rereading some of your blog articles just to review and refocus my investment strategy.

    Thank you for your all the articles and also for showing us how you are doing it like sharing you network evolution and money wise life decisions.

    Luis Sismeiro

  2. Thanks for the article!

    I’ve found myself shifting focus between the different axes over the last years.

    At the very start of my career, I focused on tracking (and reducing) expenses, as I lived in a high-cost city and was not making much. But as you pointed out, there is only so much you can do to decrease expenses.

    Therefore, my first significant financial goal was growing my salary to reach 100K. I achieved this after working for seven years, which is great!

    But while focussing on that, I probably neglected the investment axis a little. While I did invest in real estate, my portfolio is not very diversified. So now is the time for me to focus on the third axis. I’m currently reviewing my portfolio and will aim to shift it more towards stocks/ETFs.

    However, I’m also keeping an eye on expenses. Recently, I noticed that the COVID work-from-home situation had led to increasing food costs and challenged myself to decrease those again. And of course, I’m trying (so far unsuccessfully) to push my salary even higher.

    I have to admit, it’s hard to keep all the axes in focus at all times! But I think it’s good practice to review all of them periodically.

    1. Hi,

      Thanks for sharing :)

      I agree that it’s hard to focus on them all and it’s a great habit to review them all and maybe alternate between the three axes to get good results.
      As you said, it does not help to keep one axis unattended for long!

      These days we do not focus that much on expenses, we just keep it where it is. But income and investments is where we can improve more, I think.


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